Buying Spanish property off plans
The benefits of buying property off plan in Spain
An example of 100% on off plan property buying in Spain
Tips on how to buy a Spanish property off the plans
Purchasing Spanish property from plans offers a solid investment opportunity and is a preffered property investment option for large and small property speculators.
In Spain, off plan property purchasing continues to offer high return on investment. The additional benefit to the property buyer is the relatively small initial outlay - usually a 30% deposit with the balance due on completion of the complex, when property has already appreciated due to the strength of the Spanish property market.
Buying Off Plan Property in Spain offers strong investment returns
1. It's possible to achieve returns of over 100% of you initial investment within 24 months
2. Profit can be free of capital gains tax
3. Long-term ownership of the property benefits form the property appreciation in the fastest growing market in Europe.
Why buy off plan properties in Spain?
- Developers offer lower more competitive prices to off-plan buyers, sometimes under current market value, to secure immediate finance
- Access to better investment opportunities; penthouses, layout, square footage which generate a better return at resale
- Own a brand new property on completion
- Only pay 30% of property value as a deposit with no further payments until completion when the remaining 70% can be financed with a mortgage or the property sold at its increased market value
- Take advantage of future market appreciation at current market rates
Buying Off-Plan Property in Spain - An example
Purchasing off-plan property in Spain can yield a high rate of ROI.
An example: A Costs del Sol apartment with a purchase price of ¬50,000 was secured with a 30% deposit of ¬15,000. Before the development was finally completed, the purchaser sold the apartment for ¬65,000. ¬35,000 was paid to the developer as the balance of the initial purchase price. The remaining ¬30,000 represented ¬15,000 profit over the initial ¬15,000 investment. A profit of 100%. Additionally because the property was sold before completion of the development, there was zero capital gains tax liability.
With the high rate of property appreciation, 21% in 2003, off plan buying in areas such as the Costa del Sol provides a strong property investment opportunity.
How to Buy Off-Plan Properties in Spain
1. Choose the area you are interested in buying in e.g. Costa del Sol, Andalucia
2. Always use an experienced, reputable third party property broker such as the International Property Partnership who can vouch for the developer
3. Instruct a solicitor to conduct the purchase, verifying all building licenses and contracts. Make sure they are experienced and qualified in Spanish property law
4. Review the seller's deed, a recent nota simple and the full catastral certification document.
5. Review the plans in the context of planning and development in that area, is the development communally owned, building plots, environmental concerns, utilities receipts
6. Check the IBI receipt or the declaration of new construction
7. Negotiate and agree on a price, method and currency of payment
8. Sign the escritura de compraventa in the presence of a notario and confirm when you receive the escritura publica transferring legal ownership.
9. Pay required fees and taxes and 5% tax deposit to Hacienda if buying from a non-resident
|
